v2.3.0.15
Segment Information
9 Months Ended
Sep. 30, 2011
Segment Information [Abstract] 
SEGMENT INFORMATION
NOTE 16 — SEGMENT INFORMATION
As of September 30, 2011, we operated through three reportable business segments: triple-net leased properties, senior living operations and MOB operations. Our triple-net leased properties segment consists of acquiring and owning seniors housing and healthcare properties in the United States and leasing those properties to healthcare operating companies under “triple-net” or “absolute-net” leases, which require the tenants to pay all property-related expenses. Our senior living operations segment consists of investments in seniors housing communities located in the United States and Canada for which we engage independent third parties, such as Sunrise and Atria, to manage the operations. Our MOB operations segment primarily consists of acquiring, owning, developing, leasing and managing MOBs. Information provided for “all other” includes revenues such as income from loans and investments and other miscellaneous income and various corporate-level expenses not directly attributable to our three reportable business segments. Assets included in all other consist primarily of corporate assets, including cash, restricted cash, deferred financing costs, loans receivable and miscellaneous accounts receivable.
We evaluate performance of the combined properties in each reportable business segment based on segment profit, which we define as NOI adjusted for gain/loss from unconsolidated entities. We define NOI as total revenues, less interest and other income, property-level operating expenses and medical office building services costs. We believe that net income, as defined by GAAP, is the most appropriate earnings measurement. However, we believe that segment profit serves as a useful supplement to net income because it allows investors, analysts and our management to measure unlevered property-level operating results and to compare our operating results to the operating results of other real estate companies and between periods on a consistent basis. Segment profit should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of our financial performance. In order to facilitate a clear understanding of our consolidated historical operating results, segment profit should be examined in conjunction with net income as presented in our Consolidated Financial Statements and data included elsewhere in this Quarterly Report on Form 10-Q.
Interest expense, depreciation and amortization, general, administrative and professional fees, and non-property specific revenues and expenses are not allocated to individual reportable business segments for purposes of assessing segment performance. There are no intersegment sales or transfers.
Summary information by reportable business segment is as follows:
For the three months ended September 30, 2011:
                                         
    Triple-Net     Senior                    
    Leased     Living     MOB     All        
    Properties     Operations     Operations     Other     Total  
    (In thousands)  
Revenues:
                                       
Rental income
  $ 211,479     $ —     $ 58,398     $ —     $ 269,877  
Resident fees and services
    —       276,364       —       —       276,364  
Medical office building and other services revenue
    1,109       —       8,162       —       9,271  
Income from loans and investments
    —       —       —       10,072       10,072  
Interest and other income
    —       —       —       373       373  
 
                             
Total revenues
  $ 212,588     $ 276,364     $ 66,560     $ 10,445     $ 565,957  
 
                             
 
                                       
Total revenues
  $ 212,588     $ 276,364     $ 66,560     $ 10,445     $ 565,957  
Less:
                                       
Interest and other income
    —       —       —       373       373  
Property-level operating expenses
    —       188,856       20,305       —       209,161  
Medical office building services costs
    —       —       6,347       —       6,347  
 
                             
Segment NOI
    212,588       87,508       39,908       10,072       350,076  
 
                                       
Income from unconsolidated entities
    121       —       61       —       182  
 
                             
Segment profit
  $ 212,709     $ 87,508     $ 39,969     $ 10,072       350,258  
 
                               
 
                                       
Interest and other income
                                    373  
Interest expense
                                    (73,756 )
Depreciation and amortization
                                    (161,027 )
General, administrative and professional fees
                                    (20,624 )
Loss on extinguishment of debt
                                    (8,685 )
Litigation proceeds, net
                                    85,327  
Merger-related expenses and deal costs
                                    (69,350 )
Other
                                    (14,436 )
Income tax benefit
                                    13,904  
 
                                     
Net income
                                  $ 101,984  
 
                                     
For the three months ended September 30, 2010:
                                         
    Triple-Net     Senior                    
    Leased     Living     MOB     All        
    Properties     Operations     Operations     Other     Total  
    (In thousands)  
Revenues:
                                       
Rental income
  $ 117,906     $ —     $ 22,817     $ —     $ 140,723  
Resident fees and services
    —       113,182       —       —       113,182  
Medical office building and other services revenue
    —       —       6,711       —       6,711  
Income from loans and investments
    —       —       —       4,014       4,014  
Interest and other income
    —       —       —       35       35  
 
                             
Total revenues
  $ 117,906     $ 113,182     $ 29,528     $ 4,049     $ 264,665  
 
                             
 
                                       
Total revenues
  $ 117,906     $ 113,182     $ 29,528     $ 4,049     $ 264,665  
Less:
                                       
Interest and other income
    —       —       —       35       35  
Property-level operating expenses
    —       74,066       7,941       —       82,007  
Medical office building services costs
    —       —       4,633       —       4,633  
 
                             
Segment NOI
    117,906       39,116       16,954       4,014       177,990  
 
                                       
Loss from unconsolidated entities
    —       —       (392 )     —       (392 )
 
                             
Segment profit
  $ 117,906     $ 39,116     $ 16,562     $ 4,014       177,598  
 
                               
 
                                       
Interest and other income
                                    35  
Interest expense
                                    (45,519 )
Depreciation and amortization
                                    (52,104 )
General, administrative and professional fees
                                    (15,278 )
Merger-related expenses and deal costs
                                    (5,142 )
Other
                                    419  
Income tax expense
                                    (1,657 )
Discontinued operations
                                    542  
 
                                     
Net income
                                  $ 58,894  
 
                                     
For the nine months ended September 30, 2011:
                                         
    Triple-Net     Senior                    
    Leased     Living     MOB     All        
    Properties     Operations     Operations     Other     Total  
    (In thousands)  
Revenues:
                                       
Rental income
  $ 450,211     $ —     $ 106,392     $ —     $ 556,603  
Resident fees and services
    —       593,348       —       —       593,348  
Medical office building and other services revenue
    1,109       —       24,941       —       26,050  
Income from loans and investments
    —       —       —       24,548       24,548  
Interest and other income
    —       —       —       529       529  
 
                             
Total revenues
  $ 451,320     $ 593,348     $ 131,333     $ 25,077     $ 1,201,078  
 
                             
 
                                       
Total revenues
  $ 451,320     $ 593,348     $ 131,333     $ 25,077     $ 1,201,078  
Less:
                                       
Interest and other income
    —       —       —       529       529  
Property-level operating expenses
    —       403,706       37,259       —       440,965  
Medical office building services costs
    —       —       19,837       —       19,837  
 
                             
Segment NOI
    451,320       189,642       74,237       24,548       739,747  
 
                                       
Income (loss) from unconsolidated entities
    121       —       (192 )     —       (71 )
 
                             
Segment profit
  $ 451,441     $ 189,642     $ 74,045     $ 24,548       739,676  
 
                               
 
                                       
Interest and other income
                                    529  
Interest expense
                                    (170,046 )
Depreciation and amortization
                                    (293,541 )
General, administrative and professional fees
                                    (51,010 )
Loss on extinguishment of debt
                                    (25,211 )
Litigation proceeds, net
                                    85,327  
Merger-related expenses and deal costs
                                    (131,606 )
Other
                                    (6,664 )
Income tax benefit
                                    23,310  
 
                                     
Net income
                                  $ 170,764  
 
                                     
For the nine months ended September 30, 2010:
                                         
    Triple-Net     Senior                    
    Leased     Living     MOB     All        
    Properties     Operations     Operations     Other     Total  
    (In thousands)  
Revenues:
                                       
Rental income
  $ 351,625     $ —     $ 47,246     $ —     $ 398,871  
Resident fees and services
    —       331,535       —       —       331,535  
Medical office building and other services revenue
    —       —       6,711       —       6,711  
Income from loans and investments
    —       —       —       11,336       11,336  
Interest and other income
    —       —       —       420       420  
 
                             
Total revenues
  $ 351,625     $ 331,535     $ 53,957     $ 11,756     $ 748,873  
 
                             
 
                                       
Total revenues
  $ 351,625     $ 331,535     $ 53,957     $ 11,756     $ 748,873  
Less:
                                       
Interest and other income
    —       —       —       420       420  
Property-level operating expenses
    —       219,802       16,267       —       236,069  
Medical office building services costs
    —       —       4,633       —       4,633  
 
                             
Segment NOI
    351,625       111,733       33,057       11,336       507,751  
 
                                       
Loss from unconsolidated entities
    —       —       (392 )     —       (392 )
 
                             
Segment profit
  $ 351,625     $ 111,733     $ 32,665     $ 11,336       507,359  
 
                               
 
                                       
Interest and other income
                                    420  
Interest expense
                                    (133,449 )
Depreciation and amortization
                                    (154,458 )
General, administrative and professional fees
                                    (35,819 )
Loss on extinguishment of debt
                                    (6,549 )
Merger-related expenses and deal costs
                                    (11,668 )
Other
                                    404  
Income tax expense
                                    (2,352 )
Discontinued operations
                                    7,139  
 
                                     
Net income
                                  $ 171,027  
 
                                     
Assets by reportable business segment are as follows:
                                 
    As of     As of  
    September 30,     December 31,  
    2011     2010  
    (In thousands)  
Assets:
                               
Triple-net leased properties
  $ 8,652,706       50.3 %   $ 2,474,612       43.0 %
Senior living operations
    5,807,192       33.7       2,297,041       39.9  
MOB operations
    2,367,480       13.8       748,945       13.0  
All other assets
    378,392       2.2       237,423       4.1  
 
                       
Total assets
  $ 17,205,770       100.0 %   $ 5,758,021       100.0 %
 
                       
Capital expenditures, including investments in real estate property and development project expenditures, by reportable business segment are as follows:
                                 
    For the Three Months     For the Nine Months  
    Ended September 30,     Ended September 30,  
    2011     2010     2011     2010  
    (In thousands)  
Capital expenditures:
                               
Triple-net leased properties
  $ 68,604     $ 211     $ 69,831     $ 12,303  
Senior living operations
    20,842       3,889       296,446       6,782  
MOB operations
    23,432       218,307       30,301       233,315  
 
                       
Total capital expenditures
  $ 112,878     $ 222,407     $ 396,578     $ 252,400  
 
                       
Our portfolio of properties and real estate loan and other investments are located in the United States and Canada. Revenues are attributed to an individual country based on the location of each property.
Geographic information regarding our operations is as follows:
                                 
    For the Three Months     For the Nine Months  
    Ended September 30,     Ended September 30,  
    2011     2010     2011     2010  
    (In thousands)  
Revenues:
                               
United States
  $ 542,533     $ 246,358     $ 1,132,047     $ 695,252  
Canada
    23,424       18,307       69,031       53,621  
 
                       
Total revenues
  $ 565,957     $ 264,665     $ 1,201,078     $ 748,873  
 
                       
                 
    As of     As of  
    September 30,     December 31,  
    2011     2010  
    (In thousands)  
Net real estate property:
               
United States
  $ 15,598,457     $ 4,857,510  
Canada
    397,585       422,009  
 
           
Total net real estate property
  $ 15,996,042     $ 5,279,519